(Reuters) - European shares closed at a two-week high on Monday, as positive updates on U.S. President Donald Trump’s health, a U.S. stimulus package and a spate of dealmaking activity lifted investor spirits.
The pan-European STOXX 600 index .STOXX gained 0.8%, extending gains from last week. Sectors considered more economically sensitive such as oil and gas .SXEP, travel and leisure .SXTP, and automakers .SXAP boosted the main markets.
That was despite a 36.2% plunge in Cineworld CINE.L after the world's second-biggest cinema chain said it would close all of its UK and U.S. movie theatres later this week, leaving as many as 45,000 workers unemployed.
Investors took heart from signs that Trump’s health is improving after he tested positive for COVID-19 on Friday, news that sent financial markets into a tailspin.
Doctors treating Trump said he could be sent back to the White House as soon as Monday, although outside experts warn that his case may be severe, raising uncertainty about the outcome of the Nov. 3 presidential election and a new U.S. fiscal stimulus being debated by lawmakers in Washington.
“Markets may remain choppy over the coming weeks,” said Graham Secker, chief European equity strategist at Morgan Stanley.
“Once we get some clarity on the U.S. election, Brexit and vaccine front, I think that’s going to be a positive catalyst for market.
“In the next 3-6 months view, this is a market where you’d want to buy into the weakness because we do expect 2021 to be quite a lot better than what we have been seeing this year.”
Madrid-listed stocks .IBEX outperformed with 1.2% on reports of consolidation in the banking sector.
Italy's Nexi NEXII.MI rose 3.1% after SIA and it agreed a long-awaited merger to create a dominant domestic payments group with 1.8 billion euros ($2 billion) in revenue.
Reporting by Sruthi Shankar; editing by Uttaresh.V and Ed Osmond
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